Business Abroad: A Man of Marks

Shortly after the death of Pope Pius XI, according to a legend beloved of German businessmen, a pair of international financiers were discussing possible successors to the papacy. “Well,” began one of them thoughtfully, “what about Hermann Abs?”

Apocryphal as it is, the story is a fair indication of the awe commanded in U.S. and European financial circles by mustachioed Hermann J. Abs, 60, the suave chief executive of West Germany’s Deutsche Bank. Unhampered by the kind of legislation that restricts the scope of U.S. banks. West German banks combine the functions exercised in the U.S. by investment banking houses, commercial banks and savings banks, are also free to operate mutual funds and act as brokers. As a result, German bankers wield far more power than their U.S. counterparts. And as boss of his nation’s biggest bank, Hermann Abs is the most powerful German banker of all.

Besides running Deutsche Bank, Abs is a director of 25 of the largest German corporations, plays a major role in deciding where Germany’s investment capital shall be sluiced. On the political front, he is an unofficial ambassador to the world’s financial centers and a confidant of Konrad Adenauer. (“Whenever the Chancellor is worried, he calls me.” says Abs matter of factly.) So sought after is Abs’s advice that a colleague who recently asked for an appointment in November 1962 was regretfully informed that the date was already spoken for.

Into Mutuals. The Deutsche Bank, broken up by the Allies after World War II, was re-established under Abs’s guiding hand only four years ago, is now more prosperous than ever before in its history. It has 450 branches throughout West Germany and West Berlin, 19,000 employees, and assets that it lists at $2.8 billion—a highly conservative underestimate. Last year its earnings were a tidy $25 million.

Under Abs’s imaginative drive, Deutsche Bank has expanded its services to small depositors, and even opened up a personal loan department—a field that European banks long considered beneath their dignity. To bring more West Germans into the securities market, Abs set up in 1956 a mutual fund, Investa, whose holdings are now worth $166 million. Last year, to encourage investment in foreign enterprises, he established two more mutual funds composed entirely of shares in non-German companies. But Abs’s chief interest still lies in financing German industry, and over half of the bank’s loans go to industrial firms.

The Wunderkind. The son of a successful Rhineland lawyer, Abs studied law at Bonn University, but quit to learn banking. After apprenticeships in Paris, Amsterdam, London and New York, he joined a private banking house in Berlin in 1929 and quickly attracted attention by his grasp of international finance. His appointment in 1937 as head of the Deutsche Bank’s foreign department established him at 36 as the Wunderkind of German banking. Though he is a devout Catholic and did not join the Nazi Party, Abs, as a top banker, was inevitably involved in the Nazis’ financial wheeling and dealing. But at war’s end, an Allied Denazification Board placed him in Category 5—the classification reserved for Germans exonerated of active support of the Hitler regime.

After the war, Abs stayed in seclusion on his Rhineland estate until 1948, when he was tapped to run the agency that dispersed to German industry the credits generated by Marshall Plan aid. By insisting on first rebuilding Germany’s heavy industry, Abs became, along with Economics Minister Ludwig Erhard, a major architect of the German “economic miracle.” In 1953, after Adenauer asked him to settle up Allied war claims against Germany, Abs succeeded in re-establishing West Germany’s international financial credit at the relatively modest cost of $3.3 billion—a feat for which the German government gratefully awarded him its Order of Merit.

The Pony Express. Nowadays the task of handling the mushrooming affairs of the Deutsche Bank keeps Abs on a man-killing schedule. Much of his decision making is done on airplane flights, during which officials of one Deutsche Bank branch after another accompany him in relays like Pony Express riders, a new team coming aboard with its problems at each stop. But Abs has also found time to spearhead an increasingly potent campaign for an international “Magna Carta” that would discourage governments from arbitrarily expropriating or discriminating against foreign capital.

Though he belongs to no political party, Abs was offered the post of Foreign Minister after the recent German elections. He refused on the grounds that his talents were economic. But when asked if he rules out all political jobs—say, the Economics Ministry if Erhard should succeed Adenauer as Chancellor—Abs abandons his usual mocking wit. Says he: “Circumstances can arise in which no one can refuse to accept such responsibility.”